Mitt Romney: Let Detroit Go Bankrupt

Former Massachusetts Governor Mitt Romney has a must read Op Ed on troubles facing Chrysler, Ford and GM in today’s New York Times.

Let Detroit Go Bankrupt

By Mitt Romney, New York Times Op-Ed, Wednesday, November 18, 2008

Boston

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable. Read the rest…

Gov. Romney is right, simply witting Detroit a check will only delay the inevitable. If the Big 3 are going to survive long term they need restructure drastically.

Allahpundit has commentary and video @ Hot Air.

Counterpoint: General Motors Chairman and CEO Rick Wagoner explains “Why GM Deserves Support” in today’s Wall Street Journal.

5 Myths About the 2008 Elections

Washington Post writer Chris Cillizza examines and attempts to debunk 5 myths about the 2008 elections… The entire article is worth reading but the two points that stand out in my opinion are these:

4. A Republican candidate could have won the presidency this year.

I doubt it. In the hastily penned postmortems of campaign ‘08, much of the blame for McCain’s loss seems to have fallen at the feet of the candidate and his advisers, who (so the narrative goes) made a series of lousy strategic decisions that wound up costing the Arizona senator the White House. There’s little question that some of the choices McCain and his team made — the most obvious being the impulsive decision to suspend his campaign and try to broker a deal on the financial rescue bill, only to see his efforts blow up in his face — did not help. But a look at this year’s political atmospherics suggests that the environment was so badly poisoned that no Republican — not Mitt Romney, not Mike Huckabee, not even the potential future GOP savior, Louisiana Gov. Bobby Jindal — could have beaten Obama on Nov. 4.

Why not? Three words (and a middle initial): President George W. Bush.

In the national exit poll, more than seven in 10 voters said that they disapproved of the job Bush was doing; not surprisingly, Obama resoundingly won that group, 67 percent to 31 percent. But here’s an even more stunning fact: While 7 percent of the exit-poll sample strongly approved of the job Bush was doing, a whopping 51 percent strongly disapproved. Obama won those strong disapprovers 82 percent to 16 percent. And Bush’s approval numbers looked grim for the GOP even before the September financial meltdown.

Just one in five voters in the national exit polls said that the country was “generally going in the right direction.” McCain won that group 71 percent to Obama’s 27 percent. But among the 75 percent of voters who said that the country was “seriously off on the wrong track,” Obama had a thumping 26-point edge.

Those numbers speak to the damage that eight years of the Bush administration have done to the Republican brand. It’s a burden that any candidate running for president with an “R” after his — or her — name would have had to drag around the country.

5. McCain made a huge mistake in picking Sarah Palin.

No subject is more likely to break up a dinner party early than the Alaska governor McCain chose as his running mate. Everyone not only has an opinion about her qualifications (or lack thereof) but also feels it necessary to share those opinions with anyone within shouting range.

Love her or loathe her, the data appear somewhere close to conclusive that Palin did little to help — and, in fact, did some to hurt — McCain’s attempts to reach out to independents and Democrats. But just because Palin doesn’t appear to have helped McCain move to the middle doesn’t mean that picking her was the wrong move.

Remember where McCain found himself this past summer. He had won the Republican nomination, but the GOP base clearly felt little buy-in into his campaign. A slew of national polls reflected that energy gap, with Democrats revved up about the election and their candidate and Republicans somewhere between tepid and glum.

Enter Palin, who was embraced with a bear hug by the party’s conservative base. All of a sudden, cultural conservatives were thrilled at the chance to put “one of their own” in the White House. In fact, of the 60 percent of voters who told exit pollsters that McCain’s choice of Palin was a “factor” in their final decision, the Arizona senator won 56 percent to 43 percent.

For skittish conservatives looking for more evidence that McCain understood their needs and concerns, Palin did the trick. It’s hard to imagine conservatives rallying to McCain — even to the relatively limited extent that they did — without Palin on the ticket. And without the base, McCain’s loss could have been far worse.

I agree with Cillizza on both points.

1) Republicans had no chance in this election… Over the last decade they’ve abandoned traditional conservative principles in favor of some sort of squishy, centrist/populist quasi conservative “Republicanism” that lead to out of controlled spending and bad policy ideas like campaign finance reform, no child left behind, and amnesty for illegal aliens.

If Republicans expect to have any chance in the 2010 mid-terms or in 2012 Presidential election they need rediscover traditional conservative principles. Defining those principles isn’t a simple task but for me they start with a fundamental unwavering belief that, in the words of the Declaration of Independence, “… all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

It used to be that Republicans embodied those principles by fighting for fiscal responsibility, limited government, private property rights, and a strong national defense. I’m not sure how or when the Republican party lost its way what I do know is they’ve lost lost two straight elections because they’ve alienated both their conservative base and independent voters.

2) Sarah Palin may not have helped McCain with independent voters she did energize the conservative base of the Republican party… Without her on ticket I think it’s a safe bet that Barack Obama’s margin of victory would have been larger.

Personally, I think some Palin’s problems with independent voters sterm from the McCain campaigns management of her. I think they would have been better served by having do a handful of interviews with talk radio and local media in swing states to tell her story directly to voters before her national media interviews with Charlie Gibson and Kattie Couric.

The Morning After…

I’m pressed for time this morning so I’ll keep this short… If you’re like me you watched Sarah Palin’s speech last night with a critical eye. Personally, I thought she knocked it out of the park. She showed why grassroots conservatives love her and why smart liberals are worried or even scared… The dumb ones though are still clinging to the “she’s just a small town hick” meme and offering insightful commentary like “someone wrote that speech for her”.

Ed Morrissey has more here.

Side notes…

Michael Steele, Mike Huckabee, Linda Lingle and Rudy Giuliani all hit home runs with their speeches last night. Meg Whitman, Carly Fiorina and Mitt Romney also gave great speeches but they didn’t quite connect with me for some reason.

Videos, bios and transcripts are available here.